The protections that were deleted

To see what changed, look at what the section used to carry and no longer does. The pre-2025 NRS 116.335 contained owner-side prohibitions that Nevada investors had relied on since 2009 — among them a bar on requiring association approval before renting, a bar on amending a rental cap downward, and a bar on tenant-registration fees. The current text contains none of them.

The section now runs to three subsections. Subsection 1 is the new rulemaking power. Subsection 2 preserves the association's ability to enforce rental provisions found elsewhere in law — and names one specifically:

“…including, without limitation, any restriction on the rental of units as transient lodging pursuant to NRS 244.35351 to 244.35359, inclusive, or 268.09791 to 268.09799, inclusive.”

That is short-term-rental enforcement written into the chapter by cross-reference to the county and city transient-lodging statutes.

Two counterweights that cut the other way

Subsection 3 is the owner-protective half, and it opens with language that overrides the governing documents:

“Notwithstanding any other provision of law or the declaration to the contrary: (a) If a unit's owner is prohibited from renting or leasing a unit because the maximum number or percentage of units which may be rented or leased … have already been rented or leased, the unit's owner may seek a waiver of the prohibition from the executive board based upon a showing of economic hardship, and the executive board may grant such a waiver and approve the renting or leasing of the unit.”

Note the verb: the board may grant it. This is a right to ask and to be considered, not a right to a waiver. But it is a right that no declaration can write away, and it gives an owner facing genuine hardship a documented request the board must actually address.

Paragraph (b) is the sleeper, and in a partly-built community it is worth real money:

“(b) If the declaration contains a provision establishing a maximum number or percentage of units … which may be rented or leased, in determining the maximum number or percentage …, the number of units owned by the declarant must not be counted or considered.”

Remove developer-held units from the denominator and the cap covers a smaller pool — which means more room under it for the owners who actually live there. In a community where a declarant still holds a substantial block, this materially changes who gets to rent.

The quiet amendment that makes the rule stick

A Nevada association rule must normally be consistent with the governing documents. NRS 116.31065(4) says so, and it is the provision that would ordinarily void a leasing rule that went further than the declaration. AB 396 amended it, in six words:

“4. Except as otherwise provided in subsection 1 of NRS 116.335, must be consistent with the governing documents of the association and must not arbitrarily restrict conduct or require the construction of any capital improvement by a unit's owner that is not required by the governing documents of the association.”

That carve-out is what gives the new rulemaking power its teeth. A leasing rule adopted under NRS 116.335(1) is exempt from the consistency requirement that governs every other rule an association adopts.

What a board's file looks like before adopting one

The statute's operative limit is the phrase “reasonably related to meet underwriting requirements.” That is a factual predicate, and a board adopting a rental cap is asserting it. Practical implications:

• Identify the requirement, in writing, before the rule. A Fannie Mae or Freddie Mac project-eligibility standard, a carrier's stated condition of renewal, a lender's written project-approval criteria. The rule is measured against something specific, not against a general sense that rentals are bad for financing.
• Match the restriction to the requirement. If the underwriting standard is an owner-occupancy percentage, a cap at that percentage is defensible; an outright ban is a different instrument and needs its own justification.
• Check the declaration first. Subsection 1 is conditional. An association whose declaration neither authorises restriction nor sets a cap has no rulemaking power here at all.
• Build the hardship process now. Subsection 3(a) gives owners the right to ask. A board with no procedure will be improvising under pressure.
• Recount the cap without declarant units. If your community is still partly declarant-owned, your existing percentage calculation is probably wrong as of July 1, 2026.

For owners and investors

The thing to understand is the change in who decides and how fast. A declaration amendment is a months-long process with a supermajority vote and recording. A rule is a board agenda item. An owner who bought a Nevada unit on the assumption that the rental terms in the declaration were the rental terms should re-read subsection 1 and then read their own declaration to see whether it contains the authorisation or the cap that switches the power on.

The companion change — to the declaration-amendment statute at NRS 116.2117, which removes the grandfather protection for lender- and insurer-driven lease restrictions — is a separate development and is covered separately.